Can JetBlue withstand the simultaneous build-up of American Airlines and Delta Air Lines in Boston?
JetBlue Airways Chief Financial Officer Steve Priest bristled at the question, telling a conference in Miami this week:
“Commentators talk about Boston, they talk about Fort Lauderdale. We are 20 years old now. We are very used to competitive incursions.”
And that is a true statement. When Spirit Airlines rapidly built up in Fort Lauderdale, JetBlue was able to withstand the onslaught.
But as Brian Sumers notes, Boston is a different beast. First, Delta announced it was rapidly building up Boston and designating it a hub. It has its sight on lucrative business travel and has added international service ahead of JetBlue’s planned service to London next year.
Now American Airlines has chosen it wants to build up Boston once again. Boston was a strong focus city for US Airways prior to the merger and also offered AA-operated service to London, but after the merger service was cut back. Soon, however, American will launch new service to non-hub cities including Austin, Indianapolis, Raleigh-Durham and Wilmington, N.C. It’s also resuming London flights.
There’s room for debate over whether American is boosting service as a viable path to profit or as a punishment to Delta for poaching away LATAM (I suppose both could be true), but the result is this: huge growth in Boston that threatens the incumbent carrier, JetBlue.
At a time when JetBlue is practicing discipline and focusing on margins, American and Delta are sufficiently large to withstand fare wars as each battle for supremacy. But will JetBlue be willing to lose on the short-term to maintain its long-term position?
JetBlue, at least publicly, is not worried. Priest insists that customers appreciate JetBlue’s nonstop reach and will not abandon the carrier:
“85% of our business is point-to-point. The high-value geography that we have really lends itself to point-to-point business. Think about Boston from a geographical standpoint. It doesn’t really lend itself to a hub-and-spoke city.”
CONCLUSION
Alaska Airlines has withstood Delta’s onslaught in Seattle (and will now grow stronger with its new alliance with American Airlines). But I am not sure we can make a similar analogy with JetBlue. The next several months will be a key test for the carrier. How loyal are JetBlue’s customers? Will they abandon the “hometown” airline for cheaper prices and larger reach of American and Delta? Only time will tell.
image: Jonas Laurince / Wikimeida Commons
They said that they “Welcome the competition” but of course that’s not true. They are scared and it comes at a really bad time for Jetblue. They have no hub that they dominate where they can raise prices to withstand the assault that is coming their way. AA and DL have hubs that can offset a minor money loss in BOS.
There’s not much Jetblue can do at this point. They announced flying to Europe way too soon, they aren’t a part of an alliance and they have no airline friends who can help them. And on top of that their employees want huge raises. Happy 20th Jetblue!
Yes. If they merge with alaska. It’s a match made in heaven. Operations in two coasts and transcontinental service.
The only thing in the way are the egos of the people
Prior to JetBlue becoming Boston Logan’s largest carrier 10 years ago, pre-USAirways merger AA was largest. In addition to London, AA offered nonstops to Manchester UK, Paris, San Jose PR, San Francisco, etc.
As a very very frequent Boston flyer, I don’t think that American really poses any threat to Delta or JetBlue. SkyTeam has pretty significant international presence at Logan, while OneWorld doesn’t, JetBlue’s domestic route network is unmatched. Both have far superior products, and American is mostly bringing non main-line aircraft into the region.
Even with these service additions I’d probably put American even behind United at Logan, I can’t really ever see myself flying American out of Boston.
Yes. They run a good operation in Boston with somewhat easy connections to their international partners given the proximity and connection between Terminals C & E.
Jim you don’t seem knowledgeable at all about Skyteam. They have Delta which is #3 in Boston, AF to CDG, KL to AMS and KE to ICN & bankrupt AZ to FCO. That’s nothing to get excited about.
Oneworld has AA the #2 carrier in Boston, JL to NRT, BA to LHR, IB to MAD, QR to DOH, Latam who will be leaving/Royal Air Maroc who will joining, so the alliances are pretty evenly matched. And yes Delta with their old 767s and MD90s that they still fly pose very little threat to AA, the #2 carrier in Boston. Delta does have a ton of RJs in Boston. Let’s see how this all plays out when Delta tries failed routes in Miami that they have failed and cut before. They’ll have an uphill battle in BOS & SEA where they didn’t think AA would enter and also will have to fight a losing battle in MIA where AA has a 70% market share.
The comment by Jim has little credibility in The Fact that He claims He (as if He is some Authority) feels United is behind Delta and ahead of AA when In FACT American is #2 at Boston. Jim clearly is Biased against AA and seems to be a Delta Fanboy that proliferates Many Airline Sites and attempts to change the narrative. AA and USAirways were the Top Airline in Boston before they decided to pull back in service, allowing JetBlue to take advantage of the situation. JetBlue is a nice Airline and one that I do frequently use but I do see problems ahead IF they do not Merge with another Carrier (and Alaska is not One of the choices). Combining JetBlue with SPIRIT or FRONTIER would create a Larger Competitor on the National Scale with a Larger Fleet,Bigger Network and more capabilities. Those three Airlines may be different Operationally but at least A Merger would be a Benefit to them and the Consumer. Out of the Big US3 Carriers, JetBlue would never be allowed to Combine with Delta (NYC/BOS) or United (NYC Total Dominance) leaving only AA (South Florida) would be Issues. Southwest doesn’t need the hassles of a Merger nor do I see them being interested in Any of the other Carriers unless a prolonged grounding of the 737MAX curtails All growth for them. In Closing, Jim…needs a to be a little more knowledgeable before He States Anything.
Marshall… I’m sorry to burst your bubble but Delta doesn’t fly any MD90’s to BOS and they also don’t have a ton of RJ’s there as well. I hate to say it Marshall but it seems to me that you don’t have much knowledge about Delta and their operation at BOS… Just saying.
Someone recently pointed out to me that JB has codeshare agreements with 10 Star Alliance carriers. Any chance they might join Star Alliance the way Alaska is joining OneWorld? I think it would be a good boost to both UA and JB, and I think their route networks are more complimentary than competitive, especially if you consider east and west NYC metro different markets (and they are in a lot of ways).